BHP Billiton has approved an initial funding of A$244 million for the South Flank project which is expected to be submitted for Board approval in the middle of the 2018.

Located in the central Pilbara in WA, the South Flank project is BHP’s preferred option to replace production from the 80 Mtpa Yandi mine when it reaches the end of its economic life in the early-to-mid 2020s.

BHP President Operations, Minerals Australia, Mike Henry, said the funding – which will be used primarily for the expansion of accommodation facilities to support current and future workforce requirements – will generate several hundred construction jobs and provide exciting opportunities for Western Australian suppliers.

“As well as supporting our current operational requirements, this work will advance potential first ore from South Flank, while we further optimise the full development and progress external and internal approvals,” Mr Henry said.

“As we have said previously, a continuing stable investment environment in Western Australia is required to underpin ongoing investment in the business, including this project.”

Mr Henry said the capital cost for the project, whose full development would generate several thousand jobs during construction, is expected to be somewhere in the region of US$30 to US$40 per tone.

“The capital efficiency of South Flank is underpinned by the planned use of existing infrastructure at the Mining Area C operation, which would, if approved, become one of the largest standalone iron ore processing centers in the world, within reach of several billion tonnes of high-grade ore,” he concluded.

According to the giant miner, first ore from the South Flank project is targeted for the 2021 calendar year, with ramp-up of operations timed to coincide with the ramp-down of Yandi.